Compare Today’s Refinance Rates

• Are mortgage refinance rates expected to rise?

  The refinance window might soon be closing. Following through on a move it telegraphed in September, the Federal Reserve in early November 2021 indicated it would slow its pace of buying Treasury bonds and mortgage-backed securities. The “taper,” as it's known by economists, sets the stage for higher mortgage rates.

  So, if you have a pre-pandemic mortgage that you haven’t refinanced, you should use this opportunity to take advantage of low rates while they’re still here. The Mortgage Bankers Association expects the average mortgage rate on a 30-year mortgage to reach 3.5 percent by mid-2022 and 4 percent by late 2022. Refinancing will be a less attractive option for millions of homeowners as rates continue that climb.

• Top 5 Bankrate refinance lenders

  • Better.com
  • Interfirst Mortgage Company
  • Fairway Independent Mortgage Corporation
  • Cardinal Financial
  • Sage Mortgage

  Methodology

  Bankrate helps thousands of borrowers find mortgage and refinance lenders every day. To determine the top mortgage lenders, we analyzed proprietary data across more than 150 lenders to assess which on our platform received the most inquiries within a three-month period. We then assigned superlatives based on factors such as fees, products offered, convenience and other criteria. These top lenders are updated regularly.

  Better.com

  Better.com (Better Mortgage) is an online mortgage lender available in most states, with a speedy process for both homebuyers and homeowners looking to refinance.

  Strengths:

  • No commissions or fees charged
  • Smart technology automatically looks for and applies discounts to eligible borrowers
  • Automated process yields a preapproval letter in three minutes

  Weaknesses:

  • No branch locations
  • Some government loans not available

  Read Bankrate's Better.com mortgage review

  Interfirst Mortgage Company

  Interfirst Mortgage Company is an online-only mortgage lender headquartered in Chicago, Illinois. The lender doesn’t charge points, application fees, lender fees or other hidden fees.

  Strengths:

  • Online application process
  • Speedy preapproval
  • No points or hidden fees

  Weaknesses:

  • Doesn’t offer FHA, VA or USDA loans
  • Requires a higher credit score to qualify

  Read Bankrate's Interfirst Mortgage Company review

  Fairway Independent Mortgage Corporation

  Fairway Independent Mortgage Corporation is one of the top mortgage lenders in the U.S., with loan products available nationwide and branch locations in most states.

  Strengths:

  • Available in all states with more than 700 locations
  • Extensive learning resources for borrowers, including Home.com
  • Streamlined electronic submission of loan documents
  • FairwayNow mobile app allows users to track application status, message the lender, upload documents, calculate payments and more

  Weaknesses:

  • Does not advertise rates online

  Read Bankrate's Fairway Independent Mortgage Corporation review

  Cardinal Financial

  Cardinal Financial is a national mortgage lender with both online capabilities and more than 115 brick-and-mortar locations for borrowers. Borrowers have closed in as few as seven days, but the average closing (for a purchase) takes roughly 30 to 35 days.

  Strengths:

  • Offers prequalification and preapproval
  • Provides disaster relief home financing, construction loans, manufactured home loans, tiny home loans and container home loans
  • Works with affordable housing, first-time homebuyer and down payment assistance programs nationwide

  Weaknesses:

  • Limited information online regarding fees and interest rates

  Read Bankrate's Cardinal Financial mortgage review

  Sage Mortgage

  Sage Mortgage is an online mortgage company that both underwrites loans and works with multiple wholesale lenders. Along with assisting you with finding a loan, the company can help you secure a preapproval in one to two days, and the typical closing takes 27 days.

  Strengths:

  • Works with multiple wholesalers to offer competitive rates and fast cycle times
  • Dedicated loan officer works with borrowers throughout the entire process
  • Applications take approximately eight minutes and most mortgages close within 27 days

  Weaknesses:

  • Doesn’t offer VA loans

  Read Bankrate's Sage Mortgage review

 

How to refinance your mortgage in 5 steps

Refinancing can save you thousands of dollars a year, but it does require some work on your part. Here’s a quick guide:

1. Check your credit score

A better credit score will help you secure a better rate and make your refinance even more cost-effective. If you’re not happy with your credit score or the rates you’re being quoted, work on boosting your credit first, then try to refinance again once you’ve improved it.

2. Figure out how long it will take you to break even

One of the most important factors in refinancing is figuring out your break-even timeline. A refi usually comes with upfront costs at the closing, just like an initial mortgage, and those can be thousands of dollars or more. If you’re not planning to stay in your current home for more than a few years, the savings you get from a lower rate might not outweigh those costs before you move. Bankrate’s refinance calculator can help you figure out this timeline.

3. Compare lenders

It’s just as important to shop around when you refinance as it is when you’re applying for your purchase mortgage. If you’re refinancing to save money, you want to make sure you’re getting the best possible deal. Check out Bankrate’s lender reviews to help make your decision.

4. Get your paperwork in order

Once you’ve identified your lender, find out what paperwork you need and submit your application. The faster you gather all the required documents, the faster the lender will be able to process your loan.

5. Be patient

Refinancing isn’t quite as hard as shopping for a house, but it still takes some time. While your loan is in process, don’t open new credit accounts or make other large purchases until the new mortgage closes. Doing so can derail your application.

>> For more information, read Bankrate's guide on refinancing your home loan.

Pros and cons of refinancing

Refinancing can be a smart move, whether it helps you achieve more breathing room in your monthly budget by securing a lower rate or tap your home equity to fund a home renovation or other project through a cash-out deal.

Pros

• You can lock in a lower rate by refinancing, which should make your monthly payments lower and give you some money back in your budget.
• If your home’s value has risen, you might be able to end private mortgage insurance (PMI), which will also lower your monthly expenses. PMI should end automatically once you get to at least 20 percent equity owned free and clear, but it’s usually a good time to consider a refinance once that happens, too.
• If you need money for renovations, a cash-out refi offers cheap capital. It can make your monthly payments more expensive, but home improvements boost your equity value even more.

Cons

• Refinancing costs money. Closing costs can total 2 percent to 5 percent of the amount of the mortgage, which is why it’s so important to make sure you’ll recoup those costs before you move.
• If you refinance from a 30-year loan to another 30-year loan, you’ll extend your repayment period. A new loan restarts the repayment clock.

>> Read more about pros and cons of refinancing

Mortgage refinance FAQs

• What is a mortgage refinance?

  A refinance allows you to pay off your old loan and replace it with a new mortgage at a new term and a new rate. You’ll have to provide a small mountain of documents, including tax returns and bank statements.

  >> Read more about how refinancing a mortgage works

• How do mortgage refinance rates work?

  Mortgage interest is simply how much you pay a lender to borrow its money. If you’re taking out a $100,000 mortgage, you’ll pay back more than $100,000 over time for the privilege. Shorter-term loans usually have lower interest rates than longer-term ones, but their monthly payments are typically higher. For example, a 15-year mortgage will be a lot less expensive overall than a 30-year one because you’ll pay less interest, but you’ll have to pay more each month because of the shorter repayment window. That can squeeze your monthly budget.

  >> Read more about how refinancing a mortgage works

• Why compare mortgage refinance rates?

  Shopping around for quotes from multiple lenders is key for every mortgage applicant. When you shop, consider not just the interest rate you’re being quoted, but also all the other terms of the loan. Be sure to compare APRs, which include many additional costs of the mortgage not shown in the interest rate. Some institutions may have lower closing costs and fees than others, or your current bank or credit union may extend you a special offer. Don’t be afraid to walk away from your current lender when you refinance. If you can find a better deal elsewhere, go for it. Look at quotes from online and traditional banks. Consider using a mortgage broker, who will be able to provide rates from wholesale lenders.

  >> Read more about how to get the best refinance rate

• What is required to refinance your mortgage?

  To refinance your existing loan, you’ll need to meet strict requirements, provide a bunch of paperwork and ensure you’ve built up enough equity in your home, especially if you want to take cash out. Here are some of the things your lender will likely want to see:

  • Identification
  • Tax returns
  • Proof of assets, including bank statements and brokerage account statements

  Requirements vary, so talk to your lender about their credit score standards, minimum loan values and the sorts of documentation you need to supply early. The sooner you can submit your documents, the faster you’ll get to closing.

  >> Read more about what to expect from lenders

  You’ll also need to make sure you have enough equity for the kind of loan you’re considering. For a cash-out refinance, most lenders require that you have a minimum of 20 percent equity in your home. For a rate-and-term refinance, the equity requirement will vary by lender, but you’ll most likely need to continue paying PMI, even after a refinance, if your new loan is worth more than 80 percent of your home’s total value.

  >> Read more about how to refinance your mortgage

• Are mortgage rates different for those looking for a refinance?

  Refinance and purchase loans typically have the same rate. Borrowers might notice slightly higher refinance rates when they’re in demand. Experts don’t recommend trying to time the market — in other words, waiting for rates to drop — as there are so many variables that can affect rates, making it difficult to accurately predict whether they’ll rise or fall.

  If you find a rate that will save you money, then it’s a good idea to lock it in so you don’t risk missing out if rates jump.

• What are the different types of refinancing?

  Rate-and-term refinance

  A rate-and-term refinance allows you to replace your existing mortgage with a new one that has a different rate, terms or both. Unless you make a lump sum payment toward your principal, it does not change how much you owe.

  With a rate-and-term refinance, borrowers can reduce their interest rate, lower their monthly payments (by extending their loan or through that new rate, or both) or shorten their term (which usually raises monthly payments) in order to pay off the loan faster.

  Cash-out refinance

  A cash-out refinance allows you to tap your equity by refinancing your mortgage. Because you're withdrawing cash from your home’s value, the new mortgage amount will be higher than your current loan. Lenders typically limit cash-out refinances to no more than 80 percent of your home’s value so that you still have some equity left in your home.

  Sometimes lenders will also charge higher interest rates because the loan amount is increasing. Between a larger mortgage and higher interest rate, make sure you run the numbers before you try to cash out.

  Streamline refinance

  Streamline refinance is a product specifically for FHA-insured mortgages. The advantage of streamline refinancing is that there are minimal credit requirements and the loan processing is typically fast (because appraisals aren’t required and there are fewer asset and income verification requirements). A streamline refinance can also be less expensive than conventional refinancing. Some lenders offer streamline refinances with no upfront costs wherein the lender will pay some or all of the closing costs in exchange for a higher interest rate.

  >> Read more about types of refinancing

• How much does refinancing cost?

  Closing costs for refinancing your mortgage can run thousands of dollars, usually between 2 and 5 percent of the loan amount. These costs also vary by where you live, as origination fees, third-party fees and taxes differ by city and state.

  At the median U.S. home price of $404,700 in October 2021, you could expect to pay about $8,094 to as much as $20,235 in refinance closing costs. But there’s a wide variation nationally in these numbers.

  >> Read more about the cost of refinancing

• Is now a good time to refinance?

  The short answer is yes, there’s never been a better time to refinance your mortgage.

  Although mortgage rates have been on an upward trend this year, they started out at record lows, and are still very low by historical standards. Most experts expect rates to keep rising through 2022, so now’s the time to take advantage of rates as they are, before they climb higher.

  >> For more information, read Bankrate's mortgage forecast

• Is it worth it to refinance your mortgage?

  Whether it’s worth it to refinance depends totally on the numbers, no guesswork involved. It’s all a matter of when the savings outweigh the costs. Bankrate’s mortgage refinance calculator will run the numbers for your specific mortgage rate and term and give you the exact number of months it will take to break even and start saving.

  If you’d rather not crunch those numbers just yet, you can be pretty sure you’ll save money with a mortgage refinance if you shave 1 percentage point or more off your current mortgage rate. Also, figure that to get the best rate, you’ll need to have a credit score of 740 or higher and have enough equity in your home (at least 20 percent) to avoid the cost of private mortgage insurance.

  Here’s a quick look at why people refinance their mortgage:

  • Saving money on interest costs by lowering your monthly payment and or the term (number of years) you pay the loan.
  • Getting rid of an adjustable-rate loan. These loans with annual interest-rate resets have fallen out of favor and with good reason. Why take a chance on rates fluctuating when you can lock in a sure and low rate for the life of the loan?
  • Raising cash. If you need money to pay for home improvements or fund college for your kids, home equity can be tapped with a cash-out refi where you receive some of your equity as a check at closing. The lower interest rate may mean you’ll have the cash and your payments won’t rise either.
  • Take advantage of your improved credit. If your credit was tarnished when you first took out your mortgage and has improved since, you may be able to save even more. Your new rate will reflect your improved credit and the prevailing interest rates.

  >> To calculate your savings, check out Bankrate's mortgage refinance calculator

  >> Read more about the home equity needed to refinance